International Journal of Management and Commerce Innovations ISSN 2348-7585 (Online) Vol. 7, Issue 2, pp: (1466-1477), Month: October 2019 - March 2020, Available at: www.researchpublish.com
IMPACT OF TAX REVENUE ON ECONOMIC PERFORMANCE OF NIGERIA 1 1
Eze Gbalam Peter, 2Emmanuel ATAGBORO
Ph.D, Senior Lecturer, Department of Banking and Finance, Management Sciences, Niger Delta University, Amassoma, Bayelsa State 2
Department of Accountancy, Management Sciences, Niger Delta University,Amassoma, Bayelsa State atagboroemmanuel@yahoo.com
Abstract: The study empirically examines the impact of tax revenue on economic performance of Nigeria. It considered the two major categories of taxes which are direct and indirect taxes, and the study focused on the various types of taxes collected by the federal, state and local governments. The secondary data – projected taxation values and tax revenue for the period 2001 to 2018 were obtained from the Central Bank of Nigeria Statistical Bulletin. The Ordinary Least Square (OLS) statistical technique was adopted in the analysis of the data using the simple regression model via the STATA 13.0 software. The analyses were done in sections: descriptive statistics (mean, standard deviation, minimum and maximum values, normality test (skewness, kurtosis, and Jarque-Bera), ordinary least square regression estimates analysed and interpreted include regression coefficients, r-squared (R2), adjusted r-squared, f-test, and t-test). The study has depicted on general note that tax revenue has impacted positively on economic performance of Nigeria, though, two of the taxes, namely value added tax (VAT) and customs and excise duties (CED) have significant impact on gross domestic product but negative relationship, while company income tax (CIT) and petroleum profit tax (PPT) did not show significant impact but depicted positive correlation. The import of this revelation is that more attention needs to be paid on indirect taxes in order to make them have the desired positive impact on economic performance of Nigeria. Well-equipped database on tax payers should be established by Government at all levels with the aim of identifying all possible sources of income of tax payers for tax purpose, for a better tax administration, adequate machinery should be put in place and strengthened, the level of the deterrent punishment should also be made stricter and there should be continuous education for the citizens on the importance of tax payment and the problems attached to nonperformance of their civil obligations. Keywords: Tax Revenue, Economic Performance, tax administration, Nigeria.
1. INTRODUCTION Taxation is not a new concept in Nigeria and the globe in general. Taxation has been in existence in Nigeria even before the coming of the colonial men or the British. Tax can be defined as the system of imposing a compulsory levy on all incomes (from goods, services, and properties of individuals, partnerships, trustees, executorships, and companies by the government (Samuel and Simon, 2011;Yunusa, 2013). Income tax is one of the significant sources of income for all governments, and it is a factor to be figured within the Federal Government’s budget, with the taxes so collected come back to the taxpayer in the form of services in Nigeria, and has over the years encouraged or discouraged some undertakings in the private sector; though, this depends on whether the strategy of the government is towards discouraging or encouraging such companies (Ola, 2009). Taxation is recognized as a valuable tool for national development and growth in most societies. It is viewed as a major vehicle for the longterm development of infrastructures of the nation. The fluctuation in the oil price in recent years has led to a decrease in the funds available for distribution to the Central, state, and the Local Governments. The need for lower tiers of governments to generate adequate income from internal sources has become a matter of extreme resolution and significance. This need highlights the eagerness on the part of state and local governments and even the central
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